Staff Amputations in the Health Care Industry

The health care industry, which has been a stable job creator both in the recession and during the recovery, is showing signs of slowing or even grinding to a halt. According to USA Today, the healthcare industry announced 8,128 layoffs last month, more
than any other industry in the country.

This brings the yearly total for layoffs in healthcare to 41,085, so far. There are several factors that explain the sizable staff amputations at hospitals all around the country.

First and foremost, Medicare, Medicaid and private insurance companies are all slashing re-reimbursements for hospitals. This combined with the government cuts to Medicaid and a 5% reduction in funding from The National Institutes of Health, has forced many hospitals to fire hundreds and eliminate most of their research.

The cuts in Medicaid, in particular, are an issue because it means that low income Americans that visit the ER remain uninsured and unable to pay their hospital bills upon release. John Howser, assistant vice chancellor of Vanderbilt University Medical Center said that this reduction in Medicare coverage was responsible for a full 1/3 of the staff cuts he had to make.

This most recent case of industry downsizing is just another reminder of the fragility of our economic recovery. For those of you recruiting in the health care industry, the enactment of the Affordable Care Act will likely trigger re-staffing to compensate for the increased number o ensured patients visiting hospitals.

It’s just a matter of waiting to see how strong the Medicaid program is after all is said and done in Congress.

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